Colorado MortgageMortgage Colorado
The Colorado Mortgage Bank Clears the Mortgage Bank Definitions
The Colorado Department of Regulatory Agencies, Division of Real Estate, issued a May 22, 2012 policy paper clarifying which businesses do not need to be approved as mortgage banks.... Apart from the exemption for large creditors, the Declaration also provides that mortgage insurers providing contractual coverage are not deemed to be mortgage underwriters.
Leading generating businesses that are not, through staff or other persons, take residence mortgage loans requests or provide or negotiate conditions for a residence mortgage loans to potential borrower also do not fulfill the mortgage company's defined by. Please click here to register for Ballard Spahr's electronic communication in a wide range of fields.
Copyright © 2012 by Ballard Spahr LLP. It is a regular bulletin published by Ballard Spahr LLP and is designed to inform beneficiaries of new legislative changes. Nothing should be interpreted as giving or giving expert opinions on any particular facts or conditions. Content is provided for general information only and you are asked to contact your own lawyer for information on your particular case and your particular rights.
Loans to individuals and families: The new federal and colorado regulations
Recently there have been a number of changes to the mortgage legislation. Colorado legislation allows certain personal credit backed by home ownership to be made contingent upon adherence to stringent license and other conditions. Such new barriers arise from rules under the Secure and Fair Enforcement for Mortgage Licensing Act 2008 ("SAFE Act"), the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") and the Colorado Mortgage Loan Originator Licensing and Mortgage Company Registration Act ("CMLO Act").
When a customer grants a home mortgage -backed mortgage more than five and a half years - he may be a "lender" and must comply with stringent Consumer Financial Protection Bureau ("CFPB") standards. Even if it is the first and only lending operation in a given year, the customer may be bound by license and other conditions, unless the operation is covered by one of Colorado's exceptions.
So long as a lawyer (or even better, a separated lawyer for both sides) is negotiating the conditions between parents and children and they do not directly negotiate the credit, the credit should not be subjected to these extra demands. On April 21, 2016, Governor Hickenlooper enacted the Mortgage Originators SAFE Act (House Bill 16-1306), thereby granting an indemnity for credits granted by one of the parents to their children.
While legislators have found a way to exclude this particular kind of lending, it is important that trustees engaged in or supporting other kinds of personal lending and property deals are conscious of these problems before they come into conflict with the new regulations.